ABSTRACT
This chapter explores pension reform trends in Organisation for Economic Co-operation and Development (OECD) countries over the last decades and discusses how already legislated measures might affect the future of pensions. While policymakers increasingly recognize the substantial challenges driven by population ageing, progress in pension policies has been uneven. Reform options to tackle these challenges are well identified, but their implementation often raises thorny political issues. Policies to increase effective retirement ages tend to be particularly unpopular. A better understanding of how financial incentives and myopia affect the retirement decision is needed. Pension communication can help inform workers of the benefits of working longer, but adjusting regulations might be needed to influence savings behaviors substantially. In addition, more research on the distributional impact of pension reforms, including across genders and accounting for inequalities in life expectancy, would be useful. Even the wealthiest OECD countries still have some pension coverage gaps, notably for the self-employed, whose integration into pension systems raises specific challenges. With increasing longevity, flexible retirement has become an important topic for policymakers although some confusion exists about whether this should be considered an instrument primarily used to raise labor supply or to increase individual well-being. Persistently low interest rates might provide new inputs in the debate between pay-as-you-go versus funded pensions. Although the COVID-19 crisis is not over at the time of writing, this chapter includes a preliminary overview of its impact on pensions.
